It's interesting to see this valuation on search as a service, given the leader, Elastic, is in obvious valuation trouble. The market is unimpressed: the Elastic stock hasn't net moved higher since mid January (so most of the time they've been public).

Just take a look at the actual business performance of Elastic.

$271m in sales for the last fiscal year. Negative $101 million operating loss. Pretty bad, although not extremely unusual for SaaS companies in high growth mode. So there must be great growth going on, right? No.

They added a mere $9m in sales last quarter. $89m in sales with a $42m operating loss (whoa). They added an additional $10m in operating loss and gained a mere $9m in sales.

So if they can keep up that rate of growth, they might generously add $45-$50 million in sales this year. Maybe 16%-18% growth for a company bleeding red ink, that isn't particularly large in terms of sales yet (ie they're struggling to generate fast growth at a small'ish scale). And all that needs to support trading for 20 times sales on a business that is a decade old and has never produced a profit.

Either they find a lot of growth soon or in the next market down cycle Elastic is worth 1/3 to 1/2 of what they're trading for now. The same will probably go for their lesser peers. The clock is starting to tick hard on these extreme valuations (hello WeWork, Uber, Lyft).